Federal Court Vacates FTC's New Merger Filing Rules

Judge rules FTC failed to justify increased reporting requirements in updated Hart-Scott-Rodino form

Published on Feb. 28, 2026

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A federal judge in Texas has ruled against the Federal Trade Commission, vacating the agency's recently updated merger filing requirements under the Hart-Scott-Rodino Act. The judge found that the FTC failed to properly justify the increased reporting burdens imposed on companies through the new form, which the agency estimated would cost filers around $350 million in labor costs annually.

Why it matters

The ruling is a setback for the FTC's efforts to gather more information from companies during the merger review process, which the agency has argued is necessary to detect potentially anticompetitive deals. However, the judge found the FTC did not provide sufficient evidence that the additional reporting requirements would actually lead to the detection of illegal mergers and save agency resources, as the FTC had claimed.

The details

In June 2023, the FTC published proposed changes to the premerger notification form required under the Hart-Scott-Rodino Act, which companies must file when pursuing mergers and acquisitions above certain size thresholds. The updated form would have required companies to report a range of new information, including details on labor violations and pending investigations. After receiving significant pushback, the FTC issued a final rule in November 2024 that was less burdensome than the initial proposal, but still drew concerns from some commissioners. In his ruling, Judge Jeremy D. Kernodle of the U.S. District Court for the Eastern District of Texas found the FTC failed to justify the costs the new form would impose on businesses, writing that the agency "failed to substantiate" its claims about the rule's benefits.

  • The FTC published a notice of proposed rulemaking on the updated merger filing form in June 2023.
  • The FTC issued the final rule in November 2024.
  • On February 12, 2026, Judge Kernodle ruled against the FTC, vacating the new merger filing requirements.

The players

Federal Trade Commission (FTC)

The U.S. government agency responsible for promoting consumer protection and preventing anticompetitive business practices.

Judge Jeremy D. Kernodle

A judge for the U.S. District Court for the Eastern District of Texas who ruled against the FTC in this case.

Chamber of Commerce of the United States

A pro-business trade association that filed the lawsuit challenging the FTC's updated merger filing requirements.

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What they’re saying

“Though the FTC asserts that the Rule will detect illegal mergers and save agency resources, the FTC fails to substantiate these assertions. The Final Rule is therefore not 'necessary and appropriate,' and the statute 'does not authorize [the FTC] to promulgate [the Final Rule].'”

— Judge Jeremy D. Kernodle, U.S. District Court Judge (Court Ruling)

“Were I the lone decision maker, the rule I would have written would be different from today's Final Rule. But it is a lawful improvement over the status quo. And although not required for the Final Rule's lawfulness, the Commission wisely accompanies the Final Rule with a lifting of the ban on early termination.”

— Andrew Ferguson, Former FTC Commissioner (FTC Concurring Statement)

“Putting aside the Khan FTC's (poor) enforcement win rate, it's hard to imagine a worse admin law record than theirs.”

— Gus Hurwitz, Colleague (Personal Communication)

What’s next

The FTC has asked the U.S. Court of Appeals for the 5th Circuit to stay Judge Kernodle's ruling while the agency appeals the decision.

The takeaway

This ruling highlights the challenges the FTC has faced in implementing new merger review policies and procedures under Chair Lina Khan's leadership, with the court finding the agency failed to properly justify the increased reporting burdens it sought to impose on companies. It underscores the importance of the FTC building a strong evidentiary record to support any changes to the merger review process.